Bluebird to merge with Gojek

On 22nd of March, about 10 thousand members of Paguyuban Pengemudi Angkutan Darat (PPAD), an association consist of public transport drivers in Jakarta, demonstrated in front of House of Parliament (DPR/MPR) building. Later on, they marched to the office of the Ministry of Communications and Information Technology to demand for the closure of online based transportation such as GrabCar and Uber. They claimed that the existence of online-based 4-wheels transportation has been harming their business. GrabCar and Uber, for example, impose very low cost for transportation compare to Bluebird taxi and other taxi companies. Thus, people would likely prefer to commute using online-based 4-wheels transportation rather than conventional taxi.

As reported in tempo.co, among the protesters, there were a number of Blue Bird taxi drivers present at the protest since the company has most numbers of taxi fleet operated in Greater Jakarta. However, BlueBird management denied that the company urged its driver to attend the demonstration. Shortly after the demonstration, as reported in liputan6.com, PT Blue Bird Tbk shares fell 0.39 percent to Rp 6,375 per share. Shares of PT Blue Bird Tbk had been in the highest level of Rp 6,450 per share and the lowest Rp 6.325 per share with total frequency stock trading about 60 times in daily based and value for Rp 598.3 million shares.

Initial Plan to Merge with Gojek

On 9th of May, Blue Bird announced its plan to merge with Gojek, one of the major online-based transportation services that operate in Indonesia. The announcement was sent to journalists but the Blue Bird management is still unwilling to disclose the exact cooperation they would engage with Gojek. Teguh Wijayanto, Head of Public Relations of PT. Blue Bird, said that the plan can’t be disclosed since the details being finalized.

“So, will we provide convenience services for passengers to book taxi through the app (Go-Jek). Besides, we also have applications My Blue Bird. People who already use this Gojek’s App, there will be new feature for booking a taxi,” said Teguh as reported in kompas.

According to Gojek, as stated in its press release, the cooperation with Blue Bird will be carried out on aspects of technology, payment systems, to the promotion. Currently, Go-Jek has an electronic payment system called Go-Pay. It enables passengers to pay cashless of services fare offered by Gojek which can be topped up from bank transfer, online and mobile. According to Gojek, the merger with Blue Bird will include this Go-pay feature. Users simply order Blue Bird Taxi from the app, and then be able to pay fare with Go-Pay. Both transport companies promised to share details about the cooperation in the near future.

Blue Bird and Gojek Scale of Business

Blue Bird Group is the biggest taxi company in Indonesia established in 1972. It operates around the nation including in major cities such as Jakarta, Bekasi, Bandung, Surabaya, Cilegon, Semarang, Manadi, Makassar, Denpasar, Mataram, Medan, Pekanbaru, Batam, Palembang and Padang. As of December 31, 2014, the company operated taxi fleet around 31.900 units in total. That amount consisted of 25,500 regular taxis, 1,300 executive taxis, 4,500 limousines and rental cars, and about 600 large and small buses. In 2015, the company obtained permission to add taxi fleet up to 7,500 units. While the first quarter of 2015, the company has added 1,000 units, bringing the total up to the end of March 2015, Blue Bird has fleet about 33,000 units. In 2014, Blue Bird recorded revenues up o Rp 2.66 trillion. Still in the same year, Blue Bird experienced foreign exchange loss due to instability of rupiah currency around Rp 23.03 billion, whereas in the first half of 2014 the company made profit rate of Rp 6.36 billion. In September 2015, the company achieved revenue of Rp 4.03 trillion, up 17.2 percent from September 2014 amounted Rp3,44 trillion. Blue Bird’s net profit until September 2015 stood at Rp 625 billion, up 16 percent from the same period the previous year amounting to Rp 537 billion.

As stated by CEO Gojek, Nadiem Makarim, in Kompas.com, currently, Gojek has fleet of approximately 200,000 motorcycle taxi drivers. He added that the company is facing fierce competition with GrabBike and Uber, which also provide online-based motorbike riding service. He continued that Gojek company is now in discussions with potential investors because it requires additional funding, along with the amount of subsidy that is expended to make a flat rate cost.

“If it continues so (subsidizing), eventually you will run out of money,” he said as reported KompasTekno on 2nd of May 2016. Nowadays, Gojek main investor is Northstar Group, a private equity firm based in Singapore, and Sequioa Capital, a prestigious american venture capital firm based in Sillicon Valey, California. However, the amount of investment is never revealed to public.

How Potential is the Cooperation between two companies?

Director of Blue Bird, Purnomo Prawiro, in interview with Indonesian Market Quotes said that the cooperation can improve the quality of service for customers of both companies throughout Indonesia. The purpose of this cooperation, he said, is to continue innovating for customers of both parties. He was sure that Blue Bird’s excellent business will complement and strengthen their leadership in Indonesia. He added, that the cooperation with Gojek will support operational activities of the company and its subsidiaries, so that it retains its survival.

“The Company believes that the collaboration can accelerate the digital revolution and further facilitate community utilizes technology solutions for everyday needs,” said Purnomo. Cooperation Gojek company and will include aspects of technology, payment systems and promotion. The whole joint initiative will focus on improving transportation services through a mobile solution that is easy and convenient for people across the archipelago. He stressed that cooperation between the two companies did not violate the law and agreements with third parties.